ANTIOCH, Tenn. – LKQ Corporation (Nasdaq: LKQ) today reported second quarter 2025 financial results and provided updated outlook for 2025, according to a press release.
Second Quarter 2025 Financial and Operating Results
Revenue for the second quarter of 2025 was $3.6 billion, a decrease of 1.9% compared to $3.7 billion for the second quarter of 2024. Parts and services organic revenue decreased 3.4% (2.7% decrease on a per day basis), the net impact of acquisitions and divestitures decreased revenue by 1.0%, and foreign exchange rates increased revenue by 2.3% year over year, for a total parts and services revenue decrease of 2.1%.
Net income2 was $192 million compared to $185 million for the same period of 2024. Diluted earnings per share2 was $0.75 compared to $0.70 for the same period of 2024, an increase of 7.1%.
On an adjusted basis, net income1,2 was $225 million compared to $261 million for the same period of 2024. Adjusted diluted earnings per share1,2 was $0.87 compared to $0.98 for the same period of 2024, a decrease of 11.2%.
The Company’s focus on cost reduction measures has resulted in more than $125 million in costs taken out over the past 12 months with an additional $75 million targeted for 2025.
North American organic revenue outperformed the market even as repairable claims across the entire industry declined 9%. In Europe, the Company has replaced more than 25% of the leadership team and continues to focus on reducing costs, rationalizing SKU’s and enhancing revenue opportunities, including entering into a strategic partnership to expand our salvage business.
Strategic Initiatives
- Simplify Business Portfolio and Operations: Streamlining operations by focusing on our non-discretionary businesses, divesting non-core assets, and enhancing efficiencies, in collaboration with qualified advisors to ensure comprehensive evaluation and execution of strategic decisions.
- Expand Lean Operating Model Globally: Continuing to scale lean operating model across all regions to drive productivity, improve execution, and accelerate decision-making.
- Invest and Grow Organically: Investing in our core businesses to achieve above market growth and drive market share gains.
- Pursue Disciplined Capital Allocation Strategy: Capital allocation remains focused on maximizing shareholder value.
Commenting on the quarter, Justin Jude, President and Chief Executive Officer, said:
“We are executing on our three-year plan outlined at our September 2024 Investor Day and are confident in our strategy. We have no doubt we have the size, scale and an unmatched distribution network that are the best in the industry. Our results this quarter reflect a Company that is in transformation. We will move faster and harder to simplify our business and reduce costs. As we sharpen our focus on people, process and performance, we will be well positioned to capitalize as the cycle in our sector turns. We are committed to delivering better results for our customers, employees and partners and importantly, creating more value for shareholders.”
Cash Flow and Balance Sheet
Cash flow from operations and free cash flow1 were $296 million and $243 million, respectively, for the second quarter of 2025. Cash flow from operations and free cash flow1 were $293 million and $186 million, respectively, for the six months ended June 30, 2025. As of June 30, 2025, the balance sheet reflected total debt of $4.5 billion and total leverage, as defined in our credit facility, was 2.6x EBITDA.
Returning Capital to Shareholders
During the second quarter of 2025, the Company invested approximately $39 million to repurchase 1.0 million shares of its common stock and distributed $78 million in cash dividends. For the six months ended June 30, 2025, the Company returned approximately $235 million to its shareholders by investing approximately $79 million to repurchase 2.0 million shares of its common stock and distributing $156 million in cash dividends. Since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 66.5 million shares of its common stock for a total of $2.9 billion through June 30, 2025. An aggregate balance of $1.6 billion remains for potential additional stock repurchases through October 25, 2026. On July 22, 2025, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on August 28, 2025, to stockholders of record at the close of business on August 14, 2025.
2025 Outlook
“As we look ahead, we are focused on executing on our strategic initiatives to deliver improved financial results. We will continue to follow a disciplined capital allocation strategy that returns capital to shareholders. Our strategy includes driving efficiencies and simplifying our business and portfolio as we look at ROIC as a constant measure. We are navigating through the cyclical issues in our marketplace and will have a stronger Company that is well-positioned when the market turns,” stated Rick Galloway, Senior Vice President and Chief Financial Officer.
Based on a confluence of macroeconomic factors in both North America and Europe, coupled with the results this quarter, LKQ is lowering its full year outlook. In North America, the Company is not seeing a recovery in the repairable claims and tariff uncertainty continues. In Europe, general economic softness and geopolitical unrest are drivers of an uncertain environment.
For 2025, management updated the outlook as set forth below:
Non-GAAP Financial Measures
This release contains (and management’s presentation on the related investor conference call will refer to) non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP.
Conference Call Details
LKQ will host a conference call and webcast on July 24, 2025 at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) with members of senior management to discuss the Company’s results. To access the investor conference call, please dial (833) 470-1428. International access to the call may be obtained by dialing (404) 975-4839. The investor conference call will require you to enter conference ID: 409932.
Webcast and Presentation Details
The audio webcast and accompanying slide presentation can be accessed at (www.lkqcorp.com) in the Investor Relations section.
A replay of the conference call will be available by telephone at (866) 813-9403 or (929) 458-6194 for international calls. The telephone replay will require you to enter conference ID: 696574. An online replay of the audio webcast will be available on the Company’s website. Both formats of replay will be available through July 31, 2025. Please allow approximately two hours after the live presentation before attempting to access the replay.
About LKQ Corporation
LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.
Forward-Looking Statements
Statements and information in this press release and on the related conference call, including our outlook for 2025, as well as remarks by the Chief Executive Officer and other members of management, that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the “safe harbor” provisions of such Act.
Forward-looking statements include, but are not limited to, statements regarding our outlook, expectations, beliefs, hopes, intentions and strategies. These statements are subject to a number of risks, uncertainties, assumptions and other factors including those identified below. All forward-looking statements are based on information available to us at the time the statements are made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
You should not place undue reliance on our forward-looking statements. Actual events or results may differ materially from those expressed or implied in the forward-looking statements. The risks, uncertainties, assumptions and other factors that could cause actual events or results to differ from the events or results predicted or implied by our forward-looking statements include the factors set forth below, and other factors discussed in our filings with the SEC, including those disclosed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our subsequent Quarterly Reports on Form 10-Q. These reports are available at the Investor Relations section on our website (www.lkqcorp.com) and on the SEC’s website (www.sec.gov).
These factors include the following (not necessarily in order of importance):
activist investors could cause us to incur substantial costs, divert management’s attention, and have an adverse effect on our business.
our operating results and financial condition have been and could continue to be adversely affected by the economic, political and social conditions in North America, Europe, Taiwan and other countries, as well as the economic health of vehicle owners and numbers and types of vehicles sold;
we face competition from local, national, international, and internet-based vehicle products providers, and this competition could negatively affect our business;
we rely upon insurance companies and our customers to promote the usage of alternative parts;
intellectual property claims relating to aftermarket products could adversely affect our business;
if the number of vehicles involved in accidents or being repaired declines, or the mix of the types of vehicles in the overall vehicle population changes, our business could suffer;
fluctuations in the prices of commodities could adversely affect our financial results;
an adverse change in our relationships with our suppliers, disruption to our supply of inventory, or the misconduct, performance failures or negligence of our third party vendors or service providers could increase our expenses, impede our ability to serve our customers, or expose us to liability;
future public health emergencies could have a material adverse impact on our business, results of operation, financial condition and liquidity, the nature and extent of which is highly uncertain;
if we determine that our goodwill or other intangible assets have become impaired, we may incur significant charges to our pretax income;
we could be subject to product liability claims and involved in product recalls;
we may not be able to successfully acquire businesses or integrate acquisitions, and we may not be able to successfully divest certain businesses;
we have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business;
our senior notes do not impose any limitations on our ability to incur additional debt or protect against certain other types of transactions, and we may incur certain additional indebtedness under our credit agreement;
each of our credit agreement and CAD Note imposes operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities;
we may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful;
our future capital needs may require that we seek to refinance our debt or obtain additional debt or equity financing, events that could have a negative effect on our business;
our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly;
repayment of our indebtedness is dependent on cash flow generated by our subsidiaries;
a downgrade in our credit rating would impact our cost of capital;
the amount and frequency of our share repurchases and dividend payments may fluctuate;
existing or new laws and regulations, or changes to enforcement or interpretation of existing laws or regulations, may prohibit, restrict or burden the sale of aftermarket, recycled, refurbished or remanufactured products;
we are subject to environmental regulations and incur costs relating to environmental matters;
if we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be negatively impacted, which could harm our operating results and investor perceptions of our Company and as a result may have a material adverse effect on the value of our common stock;
we may be adversely affected by legal, regulatory or market responses to global climate change;
our amended and restated bylaws provide that the courts in the State of Delaware are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
our effective tax rate could materially increase as a consequence of various factors, including U.S. and/or international tax legislation, applicable interpretations and administrative guidance, our mix of earnings by jurisdiction, and U.S. and foreign jurisdictional audits;
if significant tariffs or other restrictions are placed on products or materials we import or any related counter-measures are taken by countries to which we export products, our revenue and results of operations may be materially harmed;
governmental agencies may refuse to grant or renew our operating licenses and permits;
the costs of complying with the requirements of laws pertaining to data privacy and cybersecurity of personal information and the potential liability associated with the failure to comply with such laws could materially adversely affect our business and results of operations;
our employees are important to successfully manage our business and achieve our objectives;
we operate in foreign jurisdictions, which exposes us to foreign exchange and other risks;
our business may be adversely affected by union activities and labor and employment laws;
we rely on information technology and communication systems in critical areas of our operations and a disruption relating to such technology and systems, including cybersecurity threats, could harm our business;
business interruptions in our distribution centers or other facilities may affect our operations, the function of our computer systems, and/or the availability and distribution of merchandise, which may affect our business;
if we experience problems with our fleet of trucks and other vehicles, our business could be harmed;
we may lose the right to operate at key locations; and
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